For Beehive Homes, what is the purpose of the franchisee appointing the franchisor as attorney-in-fact?
Beehive_Homes Franchise · 2025 FDDAnswer from 2025 FDD Document
the foregoing steps, Franchisee hereby irrevocably appoints Franchisor as its attorney-in-fact to complete the foregoing steps for and on the behalf of the Franchisee.
- 14.5. Franchisor's Right to Purchase. As additional consideration for this Agreement, Franchisee hereby gives and grants to Franchisor and its designees, the unrestricted right and option, exercisable upon the occurrence of an Event of Default described in Section 14.1 above, and subject to the notice requirements of Section 14.2 above, or upon the occurrence of an Election Not to Renew as defined in Section 5.2 of this Agreement, or termination or expiration of this Agreement, to purchase (i) all or any portion of the Personal Property (consisting of all furniture, equipment, supplies, other chattels, intangibles and other property) in use at the Home, and/or (ii) all right, title and interest of Franchisee or its Equity Owner(s) in and to the Real Property (Home). Franchisor or its designee may exercise this right and option by delivering to Franchisee a written Notice of Exercise on or before the date which is ninety (90) days after the later of (x) the occurrence of an Event of Default; or (y) the expiration of this Agreement after Franchisee's Election Not to Renew. This right and option is in addition to any other remedies available to Franchisor at law or pursuant to this Agreement.
The exercise price for the Personal Property shall be the tax basis of such property then shown on Franchisee's books and records for federal income tax purposes. Franchisee covenants and agrees that it will not, without the prior written consent of Franchisor, remove any of the Personal Property from the Home prior to the expiration of this right and option.
The exercise price for the Real Property comprising the Home shall be the Franchisee's and/or its Equity Owner's initial cost of the Real Property, including approved debt financing.
The exercise price for this right and option shall be paid within ninety (90) days after delivery of the Notice of Exercise to the Franchisee and shall be applied (i) first, to the satisfaction of any lien of the Small Business Administration; (ii) second, to the satisfaction of all unpaid obligations of Franchisee to Franchisor, including costs, expenses and reasonable attorneys' fees
incurred in the exercise of this right; (iii) third, to the satisfaction of all mortgages, security interests, liens or encumbrances of any kind, plus accrued interest, penalties and other charges; and (iv) fourth, the balance, if any, shall be paid to Franchisee.
Source: Item 23 — RECEIPTS (FDD pages 34–123)
What This Means (2025 FDD)
According to Beehive Homes' 2025 Franchise Disclosure Document, the franchisee irrevocably appoints Beehive Homes as their attorney-in-fact for two specific purposes. First, Beehive Homes may file security agreements regarding the franchisee's personal property with the Secretary of State or a similar public official in the state where the personal property is located. They may also record a notice of interest, mortgage, deed of trust, or similar security instrument with respect to the real property (the Home) with the County Recorder or similar official in the county where the real property is located. These security instruments can be filed or recorded at times and places Beehive Homes deems appropriate to protect its rights under the Franchise Agreement.
Second, if the franchisee fails to take certain steps to disassociate from Beehive Homes after termination or expiration of the agreement, Beehive Homes is appointed as attorney-in-fact to complete those steps on behalf of the franchisee. These steps include obliterating or destroying any Names and Marks in the franchisee's possession, removing signs, destroying letterhead, disconnecting telephone numbers listed under the Names or Marks, transferring such numbers and listings to Beehive Homes, amending or canceling any assumed name or business name registrations containing any Names or Marks, and ceasing all operations at the Location.
In practical terms, this means that Beehive Homes has the legal authority to act on behalf of the franchisee in specific situations related to securing their financial interests and ensuring a clean break after the franchise agreement ends. This arrangement protects Beehive Homes' brand and assets, while also providing a mechanism to ensure compliance with the franchise agreement terms even if the franchisee is unwilling or unable to fulfill their obligations. This is a fairly common practice in franchising, where franchisors need to protect their brand and intellectual property.